<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 10-Q


(Mark One)
(X)  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 for the quarterly period ended March 31, 2002.

( )  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 for the transition period ______ to ______.

                           Commission File No. 1-13925

                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                      ------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                   38-3389456
-------------------------------             ---------------------------------
(State or other jurisdiction of             (IRS Employer Identification No.)
Incorporation or organization)

               755 West Big Beaver Rd., Suite 800, Troy, MI 48084
               --------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (248) 362-8800
                                 --------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X]  No [  ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

         COMMON STOCK $0.01 PAR VALUE                14,718,134 SHARES
         ----------------------------                -----------------
                     CLASS                        OUTSTANDING AT MAY 1, 2002



                         This report contains 19 pages.



<PAGE>



                                TABLE OF CONTENTS


<TABLE>

<S>                                                                                                 <C>
PART I  - FINANCIAL INFORMATION                                                                     PAGE

         ITEM 1.     CONSOLIDATED FINANCIAL STATEMENTS.

                     Consolidated Balance Sheets at March 31, 2002 and December 31, 2001              3

                     Consolidated Statements of Operations for the Three Months Ended
                     March 31, 2002 and 2001                                                          4

                     Consolidated Statement of Stockholders' Equity for the Three Months
                     Ended March 31, 2002                                                             5

                     Consolidated Statements of Cash Flows for the Three Months Ended
                     March 31, 2002 and 2001                                                          6

                     Notes to Consolidated Financial Statements                                       7


         ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                     FINANCIAL CONDITION AND RESULTS OF OPERATIONS.                                  11


         ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES                                        17
                     ABOUT MARKET RISKS


PART II - OTHER INFORMATION

         ITEM 1.     LEGAL PROCEEDINGS                                                               18

         ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.                                               18

         SIGNATURES                                                                                  19
</TABLE>





                                       2
<PAGE>




                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                           CONSOLIDATED BALANCE SHEETS
                   AS OF MARCH 31, 2002 AND DECEMBER 31, 2001
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                         MARCH 31, 2002  DECEMBER 31, 2001
                                                                                         --------------  -----------------
                                                                                         (UNAUDITED)
<S>                                                                                         <C>             <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                                                $ 24,989        $ 35,932
   Short-term investments                                                                     96,459          79,454
   Accounts receivable (net of allowance for doubtful accounts
      of  $7,091 and $7,388, at March 31, 2002 and December 31, 2001, respectively)            6,927           5,195
   Current portion of notes receivable (net of allowance for doubtful
      notes of $123 and $123, at March 31, 2002 and December 31, 2001, respectively)             251              --
   Inventory                                                                                      95              70
   Prepaid expenses                                                                            1,298           2,805
   Deferred income taxes                                                                       2,748           2,856
                                                                                            --------        --------
      Total current assets                                                                   132,767         126,312
NOTES RECEIVABLE (net of allowance for doubtful notes of
      $96 and $96, at March 31, 2002 and December 31, 2001, respectively)                         --              --
PROPERTY AND EQUIPMENT- Net                                                                    5,461           4,832
NON-CURRENT DEFFERED INCOME TAXES                                                                355              --
GOODWILL (net of accumulated amortization of $133 and $133
   at March 31, 2002 and December 31, 2001, respectively)                                      1,470           1,470
OTHER ASSETS (net of accumulated amortization
   of $116 and $116 at March 31, 2002 and December 31, 2001, respectively)                       327             327
                                                                                            --------        --------
TOTAL ASSETS                                                                                $140,380        $132,941
                                                                                            ========        ========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable                                                                         $  4,310        $  3,009
     Accrued liabilities:
      Race expense and point awards                                                              221              --
      Royalties                                                                                   45             222
      Payroll                                                                                  3,033           4,298
      Taxes                                                                                       83             110
      Other                                                                                    2,179           5,558
   Deferred revenue                                                                           13,923           1,511
                                                                                            --------        --------
      Total current liabilities                                                               23,794          14,708
DEFERRED INCOME TAXES                                                                             --             297
COMMITMENTS AND CONTINGENCIES                                                                     --              --
STOCKHOLDERS' EQUITY:
   Preferred stock, $.01 par value; 5,000,000 shares authorized, none issued and
      outstanding at March 31, 2002
      and December 31, 2001                                                                       --              --
   Common stock, $.01 par value; 50,000,000 shares
      authorized, 14,718,134 and 14,718,134 shares issued and
      outstanding at March 31, 2002 and December 31, 2001, respectively                          147             147
   Additional paid-in capital                                                                 87,765          87,765
   Retained earnings                                                                          28,434          29,028
   Unrealized gain on investments                                                                240
                                                                                            --------        --------
                                                                                                                 996
         Total stockholders' equity                                                          116,586         117,936
                                                                                            --------        --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                  $140,380        $132,941
                                                                                            ========        ========
</TABLE>

See accompanying notes to consolidated financial statements.



                                       3
<PAGE>




                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

<TABLE>
<CAPTION>
                                                                             2002             2001
                                                                           --------         --------
<S>                                                                        <C>              <C>
          REVENUES:
           Sanction fees                                                   $  2,704         $  2,590
           Sponsorship revenue                                                2,280            2,954
           Television revenue                                                   205              259
           Engine leases, rebuilds and wheel sales                               --              271
           Other revenue                                                        414              365
                                                                           --------         --------
                Total revenues                                                5,603            6,439

          EXPENSES:
           Race distributions                                                 1,023              741
           Race expenses                                                      1,851            1,826
           Cost of engine rebuilds and wheel sales                               --               99
           Television expense                                                    72               --
           Administrative and indirect expenses (includes severance
              expense of $0 and $386 for the three months ended
              March 31, 2002 and 2001, respectively)                          4,324            5,220
           Depreciation and amortization                                        334              402
                                                                           --------         --------
                Total expenses                                                7,604            8,288

          OPERATING LOSS                                                     (2,001)          (1,849)
           Interest income (net)                                              1,087            1,975
                                                                           --------         --------
          INCOME (LOSS) BEFORE INCOME TAXES                                    (914)             126
           Income tax expense (benefit)                                        (320)              45
                                                                           --------         --------
          NET INCOME (LOSS)                                                $   (594)        $     81
                                                                           ========         ========
          EARNINGS (LOSS) PER SHARE:
                         BASIC                                             $  (0.04)        $   0.01
                                                                           ========         ========
                         DILUTED                                           $  (0.04)        $   0.01
                                                                           ========         ========
          WEIGHTED AVERAGE SHARES OUTSTANDING:
                         BASIC                                               14,718           15,765
                                                                           ========         ========
                         DILUTED                                             14,718           15,766
                                                                           ========         ========
</TABLE>

See accompanying notes to consolidated financial statements.









                                       4
<PAGE>


                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    FOR THE THREE MONTHS ENDED MARCH 31, 2002
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                           COMMON STOCK        ADDITIONAL              ACCUMULATED OTHER
                                        ------------------       PAID-IN     RETAINED    COMPREHENSIVE  STOCKHOLDERS' COMPREHENSIVE
                                        SHARES      AMOUNT       CAPITAL     EARNINGS    INCOME (LOSS)     EQUITY        LOSS
                                        ------      ------       -------     --------    -------------     ------        ----

<S>                                     <C>        <C>          <C>         <C>           <C>            <C>           <C>
BALANCES, DECEMBER 31, 2001             14,718     $     147    $  87,765   $  29,028     $     996      $ 117,936
   Net loss                                 --            --           --        (594)           --           (594)    $    (594)
   Unrealized loss on investments           --            --           --          --          (756)          (756)         (756)
                                                                                                                       ---------
   Comprehensive loss                                                                                                  $  (1,350)
                                                                                                                       =========
                                     ---------    ---------    ---------    ---------     ---------      ---------
BALANCES, MARCH 31, 2002                14,718     $     147    $  87,765   $  28,434     $     240      $ 116,586
                                     =========    =========    =========    =========     =========      =========

</TABLE>


See accompanying notes to consolidated financial statements.








                                       5
<PAGE>

                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     2002         2001
                                                                   --------     --------

<S>                                                                <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                               $   (594)    $     81
   Adjustments to reconcile net income (loss) to
       net cash provided by operating activities:
   Depreciation and amortization                                        334          402
   Net loss from sale of property and equipment                          14            4
   Deferred income taxes                                               (544)          69
   Changes in assets and liabilities that provided (used) cash:
      Accounts receivable                                            (1,732)        (482)
      Inventory                                                         (25)          16
      Prepaid expenses                                                1,507         (379)
      Other assets                                                       --           (2)
      Accounts payable                                                1,301          469
      Accrued liabilities                                            (4,627)        (670)
      Unearned revenue                                               12,412       16,071
      Deposits                                                           --         (778)
                                                                   --------     --------
             Net cash provided by operating activities                8,046       14,801

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of investments                                          (51,825)     (12,822)
   Proceeds from sale and maturities of investments                  34,064       18,341
   Notes receivable                                                    (251)         716
   Acquisition of property and equipment                               (997)        (239)
   Proceeds from sale of property and equipment                          20           11
   Acquisition of trademark                                              --           (1)
                                                                   --------     --------
           Net cash provided by (used in) investing activities      (18,989)       6,006

NET INCREASE (DECREASE) IN CASH AND CASH
      EQUIVALENTS                                                   (10,943)      20,807
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     35,932       19,504
                                                                   --------     --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $ 24,989     $ 40,311
                                                                   ========     ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the period for:
        Income taxes                                               $      1     $     92
                                                                   ========     ========

Interest                                                           $     --     $     --
                                                                   ========     ========
</TABLE>


See accompanying notes to consolidated financial statements.









                                       6
<PAGE>


                      CHAMPIONSHIP AUTO RACING TEAMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF PRESENTATION. The accompanying unaudited consolidated
financial statements have been prepared by management and, in the opinion of
management, contain all adjustments, consisting of normal recurring adjustments,
necessary to present fairly the financial position of Championship Auto Racing
Teams, Inc. and subsidiaries (the "Company") as of March 31, 2002 and the
results of its operations and its cash flows for the three month periods ended
March 31, 2002 and 2001.

         The unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements included in the Company's
Form 10-K filed with the Securities and Exchange Commission.

         Because of the seasonal concentration of racing events, the results of
operations for the three month periods ended March 31, 2002 and 2001 are not
indicative of the results to be expected for the year.

         PRINCIPLES OF CONSOLIDATION. The consolidated financial statements of
the Company include the financial statements of Championship Auto Racing Teams
and its wholly-owned subsidiaries - CART, Inc., American Racing Series, Inc.,
Pro-Motion Agency, Ltd. and CART Licensed Products, Inc. At the end of the 2001
season, the Company discontinued the operations of American Racing Series, Inc.
All significant intercompany balances have been eliminated in consolidation.

            ACCOUNTING PRONOUNCEMENTS. In July 2001, the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 142, "Goodwill and Other Intangible Assets". This statement changes
the accounting and reporting for goodwill and other intangible assets. The
Company adopted this statement on January 1, 2002, and goodwill will no longer
be amortized; however, tests for impairment will be performed annually or when a
triggering event occurs. The Company is evaluating the effect of SFAS No. 142 on
the consolidated financial statements related to the impairment testing of
goodwill. For the three months ended March 31, 2001, our reported net income and
basic and diluted earnings per share were $81,000 and $0.01, respectively.
Adjusted for the non-amortization provisions of SFAS No. 142, our reported net
income and basic and diluted earnings per share would have been $96,000
(exclusive of the impairment of goodwill related to American Racing Series,
Inc.) and $0.01, respectively, resulting in an increase in earnings of $15,000,
or $0.00 per share for the first quarter. The after-tax impact in 2002 of the
non-amortization provisions of SFAS No. 142 is expected to be $15,000 ($0.00 per
share) for each of the four quarters.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets to be Disposed Of." This
statement retains the impairment loss recognition and measurement requirements
of SFAS No. 121. In addition, it requires that one accounting model be used for
long-lived assets to be disposed of by sale, and broadens the presentation of
discontinued operations to include more disposal transactions. The Company
adopted this statement on January 1, 2002, and there was no impact on the
financial statements as of March 31, 2002.


                                       7
<PAGE>

         RECLASSIFICATIONS. Certain reclassifications have been made to the 2001
unaudited consolidated financial statements in order for them to conform to the
2002 presentation.

2. SHORT-TERM INVESTMENTS

         The following is a summary of the estimated fair value of
available-for-sale short-term investments by balance sheet classification:

<TABLE>
<CAPTION>
                                                                                     GROSS UNREALIZED
                                                                                     ----------------
(IN THOUSANDS)                                       COST        FAIR VALUE        GAIN           LOSS
                                                  -----------    -----------    ----------     ----------
<S>                                                  <C>            <C>            <C>             <C>
MARCH 31, 2002
--------------
Corporate bonds                                      $ 4,138        $ 4,107        $   --          $  31
U.S. agencies securities                              92,081         92,352           271             --
                                                  -----------    -----------    ----------     ----------
Total short-term investments                         $96,219        $96,459        $  271          $  31
                                                  ===========    ===========    ==========     ==========
</TABLE>


<TABLE>
<CAPTION>
                                                                                     GROSS UNREALIZED
                                                                                     ----------------
(IN THOUSANDS)                                        COST       FAIR VALUE        GAIN           LOSS
                                                  -----------    -----------    ----------     ----------
DECEMBER 31, 2001
-----------------
<S>                                                   <C>            <C>            <C>           <C>
Corporate bonds                                     $    507       $    511         $   4         $   --
U.S. agencies securities                              77,951         78,943           992             --
                                                  -----------    -----------    ----------     ----------
Total short-term investments                        $ 78,458       $ 79,454         $ 996         $   --
                                                  ===========    ===========    ==========     ==========
</TABLE>

         There were no sales of investments for the three months ended March 31,
2002. Proceeds from sales of investments were approximately $1.4 million for the
three months ended March 31, 2001.

         Contractual maturities range from less than one year to two years. The
weighted average maturity of the portfolio does not exceed one year.

3. PROPERTY AND EQUIPMENT

         Property and equipment consists of the following at March 31, 2002 and
December 31, 2001:

<TABLE>
<CAPTION>
                                                            (IN THOUSANDS)
                                                     MARCH 31,         DECEMBER 31,                USEFUL LIFE
                                                       2002                2001                     (IN YEARS)
                                                 ---------------    ----------------    -----------------------------------
<S>                                                   <C>                 <C>           <C>
   Engines                                            $    --             $ 2,456       Disposed
   Equipment                                            5,567               4,890       5-20
   Furniture and fixtures                                 413                 413       10
   Vehicles                                             3,819               3,553       5-7
   Other                                                  218                 215       5 (except leasehold improvements)
                                                 ---------------    ----------------

   Total                                               10,017              11,527

   Less accumulated depreciation                       (4,556)             (6,695)
                                                 ---------------    ----------------

   Property and equipment (net)                       $ 5,461             $ 4,832
                                                 ===============    ================
</TABLE>


                                       8
<PAGE>




4. SEGMENT REPORTING

         The Company has one reportable segment, racing operations.

         This reportable segment encompasses all the business operations of
organizing, marketing and staging all of our open-wheel racing events.

         The accounting policies of the segments are the same as those described
in the summary of significant accounting policies. The Company's long-lived
assets are substantially used in the racing operations segment in the United
States. The Company evaluates performances based on income before income taxes.

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED MARCH 31,
                                                            ----------------------------
($ in thousands)                                   RACING OPERATIONS        OTHER*           TOTAL
----------------                                   -----------------        ------           -----

<S>                                                     <C>                  <C>            <C>
2002
----
Revenues                                                $ 5,564              $ 39           $ 5,603
Interest income (net)                                     1,083                 4             1,087
Depreciation and amortization                               315                19               334
Segment loss before income tax benefit                     (901)              (13)             (914)

2001
----
Revenues                                                $ 6,365              $ 74           $ 6,439
Interest income (net)                                     1,970                 5             1,975
Depreciation and amortization                               378                24               402
Segment income before income taxes                          105                21               126
</TABLE>

*Segment is below the quantitative thresholds for determining reportable
segments and commenced operations on January 1, 1997. This segment is related to
the Company's licensing royalties.

         Reconciliations to consolidated financial statement totals are as
follows:

<TABLE>
<CAPTION>
                                                           MARCH 31,         DECEMBER 31,
                                                             2002                2001
                                                         -------------       ------------
<S>                                                         <C>                 <C>
             Total assets for reportable segment            $ 139,347           $131,901
             Other assets                                       1,033              1,040
                                                         -------------       ------------

             Total consolidated assets                      $ 140,380           $132,941
                                                         =============       ============
</TABLE>

5.  COMMITMENTS AND CONTINGENCIES

         LITIGATION. On September 8, 2000, a complaint for damages was filed
against the Company in the Superior Court of the State of California, County of
Monterey. This lawsuit was filed by the heirs of Gonzolo Rodriguez, a race car
driver who died on September 11, 1999 while driving his race car at the Laguna
Seca Raceway in a practice session for the CART race event. The suit sought
damages in an unspecified amount for negligence and wrongful death. On November
5, 2001, a release signed by Mr. Rodriguez was upheld by the Court and the
causes of action for negligence dismissed based on defendants' motion for
summary judgment. The remaining count in the lawsuit is for willful and/or
reckless conduct.


                                       9
<PAGE>

         On October 30, 2000, a complaint for damages was filed against the
Company in the Superior Court of the State of California, County of San
Bernardino. This lawsuit was filed by the estate of Greg Moore, a race car
driver who died on October 31, 1999 while driving his race car at the California
Speedway during the CART race event. The suit seeks actual and punitive damages
from the Company in an unspecified amount for breach of duty, wanton and
reckless misconduct, breach of implied contract, battery, wrongful death and
negligent infliction of emotional distress. A motion for summary judgement was
filed by all of the defendants on March 15, 2002.

         The Company intends to vigorously defend itself in each of these
lawsuits and does not believe that it is liable for either of these incidents.
The Company requires each promoter to indemnify us against any liability for
personal injuries sustained at such promoter's racing event. In addition, the
Company requires each promoter to carry liability insurance, naming us as a
named insured. The Company also maintains liability insurance to cover racing
incidents. Management does not believe that the outcome of these lawsuits will
have a material adverse affect on our financial position or future results of
operations.

         On November 8, 2001, two former team owners, DellaPenna Motorsports and
Precision Preparation, Inc., filed suit against the Company in the Circuit Court
for the County of Wayne, State of Michigan, each alleging damages in excess of
$1.0 million for breach of contract, promissory estoppel, misrepresentation, and
tortious interference with contract and business expectancy. The Company intends
to vigorously defend itself in this lawsuit and does not believe the lawsuit has
merit. Management does not believe that the outcome of this lawsuit will have a
material adverse affect on the Company's financial position or future results of
operations.

         On March 26, 2002, the Company filed a complaint against Joseph F.
Heitzler, a director and former chairman, chief executive officer and president
of the Company in U.S. District Court, Eastern District of Michigan, Southern
Division. The complaint alleges that Mr. Heitzler breached his employment
contract, breached his fiduciary duties and intentionally or recklessly omitted
to disclose information to the Company in order to induce the continuation of
Mr. Heitzler's employment agreement. The suit seeks damages of an unspecified
amount. On March 28, 2002, Mr. Heitzler filed a complaint against the Company in
the Superior Court of the State of California, County of Los Angeles. The suit
seeks compensatory, exemplary and punitive damages in excess of $2.0 million for
breach of contract, fraud, negligent misrepresentation, breach of covenant of
good faith and fair dealing, declaratory relief. An amended complaint adding a
count for tortious breach of contract in violation of public policy was filed on
April 9, 2002. The Company intends to vigorously defend itself in this lawsuit
and does not believe the lawsuit has merit. Management does not believe that the
outcome of this lawsuit will have a material adverse affect on the Company's
financial position or future results of operations.

         The Company is involved in other litigation not specifically identified
above and does not believe the outcome of any of this litigation will have a
material adverse affect on its financial position or future results of
operation.





                                       10
<PAGE>


ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS



OVERVIEW

         Beginning in 2002, we are transitioning our company from a sanctioning
body to a marketing services company. Historically, we have derived our revenues
from three primary sources: sanction fees paid by track promoters, corporate
sponsorship fees and television revenues. Starting this year, we are introducing
new revenue sources to our business model.

         At certain tracks, we will be promoting our own events, and at others,
we will be partnering with experienced promoters. We intend to use the talent
and experience of our key personnel to set the standard for promotion of CART
sanctioned events, and we will participate in the potential net income from such
successful events. For the events we will be co-promoting, we will receive lower
up-front sanction fees, but our agreements provide for us to receive a majority
of any profits until the original sanction fee is received, with an equal profit
sharing thereafter. We are also taking on the risk of potential losses with
these co-promoted events.

         We have also entered into new television agreements for 2002 with Speed
Channel, Fox and CBS. These arrangements will significantly increase the number
of high quality CART programming hours that will be available to our fans
domestically. We will have six races broadcast on CBS and one race on FOX, with
the balance airing on Speed Channel. We will buy the air-time and pay for
production for the CBS and FOX races and receive the advertising time which we,
along with our agents, will be responsible to sell. This new domestic television
arrangement is different than our past television arrangement where we received
a rights fee.

         The following discussion and analysis of the financial condition and
results of operations should be read in conjunction with the unaudited
consolidated financial statements of the Company, including the respective notes
thereto which are included in this Form 10-Q.

CRITICAL ACCOUNTING POLICIES

Revenue Recognition

         One of our most critical accounting policies is revenue recognition. We
recognize our revenues as they are earned, but the determination of when they
are earned depends on the source of the revenue. Our assumptions for each
revenue source is outlined below.

         SANCTION FEE REVENUE. Generally, sanction fees are paid in advance of
the race and are recorded as deferred revenue. Revenue from sanction fees is not
recognized until the event is completed. Beginning in 2002, we have entered into
agreements with certain promoters where a portion of the contracted sanction fee
has been reduced in exchange for a percentage of the profits from the event.
Profits from these events will be recognized as sanction fee revenue when the
event is completed.

         SPONSORSHIP REVENUE. Generally, sponsorship agreements call for
quarterly payments, and each payment is recorded as deferred revenue when paid.
Revenue is recorded ratably over the life of the sponsorship agreement. Non-cash
sponsorship revenue, such as vehicles or equipment received in exchange for
sponsorship privileges to the providers, is recognized when it is received.


                                       11
<PAGE>

         ENGINE LEASE, REBUILDS AND WHEEL SALES. Engine lease revenue, relating
to our discontinued Indy Lights series, was recognized ratably over the period
covered by the agreement. Engine rebuilds and wheel sales were recognized when
the product is delivered to the customer. This revenue ceased at the end of the
2001 Indy Lights season.

         TELEVISION REVENUE. Television revenue as it relates to minimum
guarantees and rights fees is recognized ratably over the race schedule.
Beginning in 2002, we will sell the advertising for the shows to be aired on CBS
and Fox networks. Advertising revenue will be recognized for these events when
the event is completed and the advertising is aired.

         RACE PROMOTION REVENUE. Payments for commercial rights associated with
a self-promoted event that are received prior to the event will be recorded as
deferred revenue. Revenue will be recorded when the event is completed. Expenses
related to these events will be recorded in race promotion expenses.

         OTHER REVENUES. Other revenues include membership and entry fees,
contingency awards money and royalty income. Membership and entry fees and
contingency award money are recognized ratably over the race schedule. Royalty
income is recognized as the related product sales occur or on a monthly basis
based on a minimum guarantee.

Impairment

         We are subject to impairment tests in assessing the valuation of our
goodwill and long-lived assets. Goodwill represents the excess of the purchase
price of American Racing Series ("ARS") and B.P. Automotive, Ltd. and Pro-Motion
Agency over the fair value of the net tangible and identifiable intangible
assets of these acquisitions. Also included in goodwill is the purchase of the
45% minority interest of CART Licensed Products, L.P. We continually evaluate
whether events and circumstances have occurred that indicate the remaining
estimated useful life of our goodwill and long-lived assets may warrant revision
or that the remaining balance may not be recoverable. When factors indicate that
goodwill or long-lived assets should be evaluated for possible impairment, the
Company uses an estimate of fair value based on future profitability and cash
flows.

         During 2001, we determined that the goodwill and certain long-lived
assets associated with ARS were impaired due to our strategic decision to
discontinue the operations of ARS at the conclusion of the 2001 season. As a
result, we recorded an impairment charge for the goodwill and long-lived assets.

Litigation

         We are involved in litigation as a part of our normal course of
business. Our litigation proceedings are included in our most recent Form 10-K,
Item 3: Legal Proceedings and updated, as needed, in Part II-Other Information,
Item 1: Legal Proceedings in this and subsequent Forms 10-Q. Management intends
to vigorously defend against any litigation. When a complaint is filed by or
against the Company that represents a material claim, we disclose the proceeding
in our financial statements. When a claim against us is probable and estimable,
we record the expense. When we are the party filing the claim, we do not record
income until the claim for damages is received.


RESULTS OF OPERATIONS


Three Months Ended March 31, 2002  Compared to Three Months Ended March 31, 2001

         REVENUES. Total revenues for the three months ended March 31, 2002 were
$5.6 million, a decrease of $836,000 or 13% from the same period in the prior
year. This was due to decreased sponsorship revenue,


                                       12
<PAGE>

television revenue and engine leases, rebuilds and wheel sales partially offset
by an increase in sanction fees and other revenue, as described below.

         Sanction fees for the three months ended March 31, 2002 were $2.7
million, an increase of $114,000, or 4%, from the same period in the prior year
due to an annual escalation in sanction fees for our race in Monterrey, Mexico.
We staged one race during the first quarter of 2002 and 2001.

         Sponsorship revenue for the three months ended March 31, 2002 was $2.3
million, a decrease of $674,000, or 23%, from the same period in the prior year.
This decrease was primarily attributable to the loss of sponsorship income from
the Indy Lights series which we discontinued at the end of the 2001 season, as
well as a reduction in sponsorship fees from one of our sponsors, pursuant to a
renegotiation clause in the applicable sponsorship contract.

         Television revenue for the three months ended March 31, 2002 was
$205,000, a decrease of $54,000, or 21%, from the same period in the prior year.
This decrease was due to a loss of guaranteed income from our former television
partner, offset by revenue received from new international television
distribution rights.

         There were no engine leases, rebuilds and wheel sales for the three
months ended March 31, 2002, a decrease of $271,000 from the same period in the
prior year. This decrease was due to the discontinuance of the Indy Lights
Championship effective with the conclusion of the 2001 race season.

         Other revenue for the three months ended March 31, 2002 was $414,000,
an increase of $49,000, or 13%, from the same period in the prior year. This
increase was primarily attributable to an increase in commission sales from
Toyota Atlantics suppliers.

         EXPENSES. Total expenses for the three months ended March 31, 2002 were
$7.6 million, a decrease of $684,000, or 8%, from the same period in the prior
year. This decrease was due to a decrease in administrative and indirect
expenses, cost of engine rebuilds and wheel sales and depreciation, partially
offset by an increase in race distributions and race expenses, as described
below.

         Race distributions for the three months ended March 31, 2002 were $1.0
million, an increase of $282,000, or 38%, from the same period in the prior
year. The increase was due to a $10,000 participation payment that we made to
all of our teams, totaling $200,000. The increase was also due to one
Toyota-Atlantic race being held in the three months ended March 31, 2002
compared to zero races being held in the same period in the prior year,
partially offset by a decrease in Indy Lights race distributions due to zero
races being held in the three months ended March 31, 2002 compared to one race
being held in the same period in the prior year.

         Race expenses for the three months ended March 31, 2002 were $1.9
million, an increase of $25,000, or 1%, which was similar to the same period in
the prior year.

         There was no cost of engine rebuilds and wheel sales for the three
months ended March 31, 2002, a decrease of $99,000 from the same period in the
prior year. This decrease is due to the discontinuance of the Indy Lights
Championship effective with the conclusion of the 2001 season.

         Administrative and indirect expenses for the three months ended March
31, 2002 were $4.3 million, a decrease of $896,000, or 17%, from the same period
in the prior year. This decrease was primarily attributable to a decrease in
recruiting and strategic planning consulting expenses, as well as a severance
payment to a former employee that was made in the same period in the prior year.
The decrease also reflected a timing difference in our marketing expenditures in
the three months ended March 31, 2002 compared to the same period in the prior
year.

         Depreciation and amortization expense for the three months ended March
31, 2002 was $334,000, compared to depreciation and amortization expense of
$402,000 for the same period in the prior year. We


                                       13
<PAGE>

ceased amortizing goodwill as of January 1, 2002 in compliance with the
Financial Accounting Standards Board issuance of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets."

         OPERATING LOSS. Operating loss for the three months ended March 31,
2002 was $2.0 million, an increase of $152,000 compared to an operating loss of
$1.8 million for the same period in the prior year due to the items discussed
above.

         INTEREST INCOME (NET). Interest income (net) for the three months ended
March 31, 2002 was $1.1 million compared to interest income (net) of $2.0
million from the same period in the prior year. The decrease of $888,000 was
primarily attributable to a decrease in interest rates.

         INCOME (LOSS) BEFORE INCOME TAXES. Loss before income taxes for the
three months ended March 31, 2002 was $914,000, compared to income before income
taxes of $126,000 from the same period in the prior year due to the items
discussed above.

         INCOME TAX EXPENSE (BENEFIT). Income tax benefit for the three months
ended March 31, 2002 was $320,000, compared to income tax expense of $45,000
from the same period in the prior year.

         NET INCOME (LOSS). Net loss for the three months ended March 31, 2002
was $594,000 compared to net income of $81,000 from the same period in the prior
year due to the items discussed above.


SEASONALITY AND QUARTERLY RESULTS

         A substantial portion of our total revenues during the race season is
expected to remain seasonal, based on our race schedule. Our quarterly results
vary based on the number of races held during the quarter. In addition, the mix
between the type of races (street course, superspeedway, etc.) and the sanction
fees attributed to those races will affect quarterly results. During each of the
three month periods ended March 31, 2002 and 2001, CART held one race in
Monterrey, Mexico.


LIQUIDITY AND CAPITAL RESOURCES

         We have relied on the proceeds from our available cash and cash flow
from operations to finance working capital, investments and capital expenditures
during the past year.

         We have a $1.5 million revolving line of credit with a commercial bank.
As of March 31, 2002, there was no outstanding balance under the line of credit.
The line of credit contains no significant covenants or restrictions. Advances
on the line of credit are payable on demand and bear interest at the bank's
prime rate. The line is secured by our deposits with the bank.

         Our cash balance on March 31, 2002 was $25.0 million, a net decrease of
$10.9 million from December 31, 2001. This decrease was primarily the result of
net cash provided by operating activities of $8.0 million, partially offset by
net cash used in investing activities of $19.0 million.

         We anticipate capital expenditures of approximately $3.5 million during
the next twelve months. We believe that existing cash, cash flow from operations
and available bank borrowings will be sufficient for capital expenditures and
other cash needs.

         We have entered into various non-cancelable leases for office space and
equipment through 2010.

         We have implemented a stock repurchase program that was authorized by
our Board of Directors in April 2001. The program allows us to repurchase up to
2,500,000 shares of our outstanding stock, of which 1,054,000 shares have been
repurchased for an aggregate of $15.5 million through March 31, 2002.


                                       14
<PAGE>

We did not repurchase any shares in the three months ended March 31, 2002.
Repurchases under the program will be made at the discretion of management based
upon market, business, legal, accounting and other factors. Accordingly, there
is not a guarantee as to the timing or number of shares to be repurchased.

         Beginning in 2002, we will be co-promoting and/or self-promoting
certain race events. The events' financial success will be dependent on the sale
of tickets, sponsorship, hospitality, signage and other commercial rights
associated with the events. For the events where we will co-promote, we have
negotiated a reduction in the sanction fee payable to us, and we will share in
the net income of the events. We have entered into agreements with certain of
these co-promoted events whereby we have agreed to share in any losses incurred
as a result of these events. For the events where we will be the promoter, we
will have to increase our expenditures for promotion and may have to make some
capital expenditures. We are unable to assess the financial outcome of these
events.

         In light of current events and the overall state of the economy, we are
uncertain on whether we or our teams will be able to maintain the same levels of
sponsorship income that we have reported in the past or secure additional
sponsorship. In addition, we are unable to determine what effect these factors
will have on our new television package and our ability to sell television
advertising for our races. We are also unable to assess what impact a decrease
in disposable income of our fans will have on our promoters and ultimately, our
races.

         Our new television contracts, which run through 2004, require us to
purchase air-time and produce the show at our expense for the races to be
broadcast on CBS and Fox. We retain the advertising revenues for these races.
Our fixed costs for 2002 are estimated to be approximately $9.9 million.

         As we have previously reported, we are party to several lawsuits. We
cannot predict the outcome of the litigation, and at this time, management is
unable to estimate the impact that ultimate resolution of these matters may have
on the Company's financial position or future results of operations.


RELATED PARTIES

         We have entered into, and we will continue to enter into, transactions
with entities that are affiliated with our directors and/or 5% stockholders who
are owners of our race teams. Race teams that participate in the CART
Championship receive purse distributions on a per race basis and from the year
end point fund which amounts have been paid based solely upon their performance
in specific races. All of these payments are made to our race teams regardless
of the affiliation with our directors or significant shareholders. During 2002,
we also paid a participation payment to our race teams, including those
affiliated with directors and/or 5% stockholders. The following table provides
information with respect to payments made during the three months ended March
31, 2002 by us to race teams that are affiliated with directors and/or
significant shareholders of CART:

<TABLE>
<CAPTION>
RACE TEAM/AFFILIATED DIRECTOR                                     PURSE DISTRIBUTIONS           PARTICIPATION PAYMENTS
-----------------------------                                     -------------------           ----------------------

<S>                                                                      <C>                           <C>
Newman/Haas Racing/Carl A. Haas                                          $ 150,000                     $ 20,000
Team Green/Barry E. Green                                                   94,000                       30,000
Chip Ganassi Racing Teams, Inc./Chip Ganassi                                27,000                       20,000
Forsythe Racing, Inc./Gerald R. Forsythe                                    53,000                       20,000
Patrick Racing, Inc./U.E. Patrick                                           11,000                       10,000
Derrick Walker Racing, Inc./Derrick Walker                                  13,000                       10,000
</TABLE>

         Carl A. Haas, a director of the Company and a race team owner, is a
principal owner of Carl Haas Racing Teams, Ltd. and Texaco Houston Grand Prix
L.L.C., each of which have entered into Promoter Agreements with respect to CART
Championship races at the Wisconsin State Park Speedway in West Allis, Wisconsin
and at a temporary road course in Houston, Texas. Pursuant to the terms thereof,
a CART Championship race was to be held in West Allis through 2001 and in
Houston through 2003. We are currently in negotiations to finalize our agreement
for 2002, with the promoter having the option to extend for 2003 and 2004, for
the race at Wisconsin State Park Speedway and believe that the terms will be
substantially similar to our previous agreement. The Houston, Texas race will
not be held in 2002 due to construction on the temporary circuit in downtown
Houston. The sanction fees payable to CART under these agreements have been
similar to those paid by independent race promoters. Pursuant to the existing
Promoter Agreement and our current discussions with respect to the 2002 race at
Wisconsin State Park Speedway, entities affiliated with Mr. Haas will pay
sanction fees to CART in the aggregate amount of $1.7 million (Milwaukee - in
negotiation) and $2.7 million (Houston) in 2002 and 2003, respectively. In
addition, we anticipate that we will pay a total of $100,000 in sales costs and
$100,000 in marketing expenses in relation to our race at Wisconsin State Park
Speedway during 2002.

         Gerald R. Forsythe, a race team owner and 5% stockholder, is a
principal owner of the entities which entered into Promoter Agreements with
respect to CART Championship races in Rockingham, England and in Mexico City,
Mexico beginning in 2002. He is also a principal owner of Monterrey Grand Prix,
S. de R.L. de C.V. which entered into a Promoter Agreement with respect to a
CART Championship race in Monterrey, Mexico. Pursuant to the terms thereof, a
CART


                                       15
<PAGE>

Championship race will be held in Rockingham through 2006, in Mexico City
through 2006 and in Monterrey through 2005. These entities affiliated with Mr.
Forsythe have paid or will pay sanction fees to CART in the aggregate amount of
$10.9 million for 2002, $11.2 million for 2003, $11.5 million for 2004, $11.9
million for 2005 and $9.3 million for 2006. However, we are currently
negotiating an amendment relating to our race in Rockingham, England whereby we
will co-promote the event, reduce the initial sanction fee and share in the
percentage of profits. In addition, we have paid or anticipate that we will pay
a total of $300,000 in sales costs and $291,000 in marketing expenses to these
entities during 2002.

         Mr. Forsythe is also a principal owner of the entity that holds our
Mexican television rights through 2004. In return for these rights, we will
receive a minimum guarantee of $300,000, $325,000 and $350,000 for each of the
three years ending 2002, 2003 and 2004, respectively. In addition, we will
receive 70% of the net profits until we reach $500,000, $550,000 and $600,000
for each of the three years ending 2002, 2003 and 2004, respectively.

         Floyd R. Ganassi Jr., a director of the Company and a race team owner,
is a principal owner of Chicago Motor Speedway, LLC and has entered into a
Promoter Agreement with respect to a CART Championship race at Chicago Motor
Speedway in Cicero (Chicago), Illinois. Pursuant to the terms thereof, a
Championship race was to be held through 2003. The Chicago Motor Speedway, LLC
was to pay sanction fees to CART of $2.0 million for 2002 and $2.1 million for
2003. In 2002, the Chicago Motor Speedway, LLC announced the suspension of all
race events at Chicago Motor Speedway. We then entered into an agreement with
the Chicago Motor Speedway, LLC where we will rent the track for $850,000 in
2002, and we will promote the race ourselves.

         In addition to the payments described above, CART receives revenues
from its race teams, including those affiliated with CART directors and/or 5%
stockholders, for entry fees, equipment leases and other payments based solely
on participation in CART events. During the three months ended March 31, 2002,
race teams affiliated with CART directors and/or 5% stockholders made such
payments to CART as follows:

          Team Green/Barry E. Green                           $ 115,000
          Forsythe Racing, Inc./Gerald R. Forsythe               72,000
          Chip Ganassi Racing Teams, Inc./Chip Ganassi           72,000
          Newman/Haas Racing/Carl A. Haas                        75,000
          Patrick Racing, Inc./U.E. Patrick                      36,000
          Derrick Walker Racing, Inc./Derrick Walker             36,000

         We believe that all of the transactions which we have entered into with
our directors or significant shareholders are comparable to the terms that we
have in the past or could in the future enter into with third parties with
respect to each of these transactions. In order to avoid conflicts of interest,
any of our directors who are affiliated with an entity that is entering into a
transaction with us will not vote on any matter related to such


                                       16
<PAGE>

transaction, and may, in certain circumstances, refrain from participating in
any discussions related to such transaction.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

         With the exception of historical information contained in this Form
10-Q, certain matters discussed are forward-looking statements. These
forward-looking statements involve risks that could cause the actual results and
plans for the future to differ from these forward-looking statements. The
following factors, and other factors not mentioned, could cause the
forward-looking statements to differ from actual results and plans:

        -  competition in the sports and entertainment industry
        -  participation by race teams
        -  continued industry sponsorship
        -  regulation of tobacco and alcohol advertising and sponsorship
        -  competition by the IRL
        -  liability for personal injuries
        -  success of television contract
        -  renewal of sanction agreements
        -  participation by suppliers
        -  success of co-promoted and self-promoted races
        -  current uncertain economic environment and weak advertising market
        -  impact of engine specifications



ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         INTEREST RATE RISK. Our investment policy was designed to maximize
safety and liquidity while maximizing yield within those constraints. At March
31, 2002, our investments consisted of corporate bonds, U.S. Agency issues,
letters of credit, and money market funds. The weighted average maturity of our
portfolio is 287 days. Because of the relatively short-term nature of our
investments, our interest rate risk is immaterial.











                                       17
<PAGE>



                      CHAMPIONSHIP AUTO RACING TEAMS, INC.

                           PART II - OTHER INFORMATION

Item 1.           Legal Proceedings

                  On March 26, 2002, the Company filed a complaint against
                  Joseph F. Heitzler, a director and former chairman, chief
                  executive officer and president of the Company in U.S.
                  District Court, Eastern District of Michigan, Southern
                  Division, case number 0271143. The complaint alleges that Mr.
                  Heitzler breached his employment contract, breached his
                  fiduciary duties and intentionally or recklessly omitted to
                  disclose information to the Company in order to induce the
                  continuation of Mr. Heitzler's employment agreement. The suit
                  seeks damages of an unspecified amount. On March 28, 2002, Mr.
                  Heitzler filed a complaint against the Company in the superior
                  Court of the State of California, County of Los Angeles, case
                  number BC270846. The suit seeks compensatory, exemplary and
                  punitive damages in excess of $2.0 million for breach of
                  contract, fraud, negligent misrepresentation, breach of
                  covenant of good faith and fair dealing, declaratory relief.
                  An amended complaint adding a count for tortious breach of
                  contract in violation of public policy was filed on April 9,
                  2002. The Company intends to vigorously defend itself in this
                  lawsuit and does not believe the lawsuit has merit. Management
                  does not believe that the outcome of this lawsuit will have a
                  material adverse affect on the Company's financial position or
                  future results of operations.

Item 6.           Exhibits and Reports on Form 8-K.

        (a) Exhibits.
                  We were not required to file any additional exhibits for the
                  three months ended March 31, 2002.

        (b) Reports on Form 8-K.
                  We were not required to file a form 8-K during the three
                  months ended March 31, 2002.




                                       18
<PAGE>



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         CHAMPIONSHIP AUTO RACING TEAMS, INC.


   Date:   May 7, 2002                   By:     /s/  Thomas L. Carter
           -------------------------             ------------------------------

                                                Thomas L. Carter
                                                Chief Financial Officer











                                       19